Samsung's share of China's mobile phone market shrinks as domestic manufacturers launch overseas expansion

"It is almost impossible for Chinese manufacturers to surpass Samsung and Apple in the global market within three years , but some domestic mobile phone manufacturers are already on the right track, strengthening their strengths and reducing their weaknesses. There will definitely be such opportunities in the future."

At Samsung's annual meeting in 2013, a photo was shown that fit the occasion - people were about to reach the top of a snowy mountain. Samsung Group's "head" Lee Kun-hee said in his New Year's speech: "The closer we get to the top of the mountain, the stronger the wind blows, but we can't stand still." Soon after, Samsung's smartphones rose rapidly, making it the world's leading smartphone company.

Today, Samsung is facing the biggest challenge since reaching the top. Its Chinese rivals are launching the fiercest offensive against it. According to IDC data, in the fourth quarter of 2014, Samsung's market share in China has dropped from 20% at the beginning of the year to 8%, and it has been overtaken by Chinese manufacturers for three consecutive quarters. Huawei, Lenovo, and Xiaomi are all ahead of it.

"In the first quarter of 2015, we expect Samsung's shipments in China to remain at a low level, with the market ranking around fifth." Yan Zhanmeng, senior analyst at IDC China responsible for mobile phone market tracking reports, said in an interview with China Business News yesterday that Chinese mobile phone manufacturers showed an upward trend in brand and market share in 2014, and this year they are showing a trend of collectively conquering overseas markets.

Yan Zhanmeng told reporters that among the top five global manufacturers in terms of shipments in the fourth quarter of 2014, three were Chinese manufacturers, and all of them will strive to achieve the "100 million units shipment" goal this year.

Samsung "falls behind" in Chinese market

Samsung still failed to escape the curse of sluggish shipments in the first quarter.

After more than half a year of declining shipments, IDC predicts that Samsung will rank fifth in the first quarter, which is the same as last quarter. Samsung is now in a difficult situation, with Apple and Huawei in the mid-to-high-end market and domestic mobile phone manufacturers represented by Xiaomi in the lower-end market.

"For almost every Mate 7 sold by Huawei, Samsung sells one less Note 4, and the customer overlap is very high." A Samsung channel agent told the media that Samsung's channel was severely damaged by dumping goods in the second quarter of 2014, and is still in the repair and adjustment period. Therefore, it is mostly waiting and watching for the initial distribution of Galaxy S6. Currently, 70% of the major domestic public retail channels are selling Huawei phones, and the trend has reversed.

Samsung's success comes from the integration of the supply chain. Samsung purchases major components such as semiconductors and displays on its own. It is the only integrated electronics company in the world that can produce most mobile devices such as smartphones, tablets, and wearable electronics. However, with the participation of more and more Chinese manufacturers, this unique competitive advantage of the supply chain has been gradually broken.

"Apple has its own business chain and ecological chain. It is not easy to surpass its own ecosystem. But compared with Samsung, our project is no less than its own. As long as we keep working hard, everything is possible." The head of a domestic mobile phone manufacturer said that except for not making screens, mobile phone manufacturers have no other disadvantages in the supply chain.

"In the 2G era, the sales structure of mobile phones was pyramid-shaped; but now in the hybrid era of 3G and 4G, the sales structure of mobile phones is abnormal. Mobile phones in the 1,000 yuan range and around 700 yuan account for a large proportion, while the volume of mobile phones around 400 yuan is not very large. The 1,000 yuan range is the advantage of domestic mobile phones." Coolpad Vice President Cao Jingsheng told our reporter.

Samsung has felt this pressure since last year, with its global sales of mobile phones declining and its core business, smartphones, experiencing its first decline in global market share in four years. Xiaomi, known for its "cost-effectiveness", replaced Samsung as the top seller in China in the second quarter. Many analysts believe that Samsung is still in danger.

Yan Zhanmeng told reporters that as Samsung's sales and market share fluctuate, the global market landscape will continue to change.

Chinese Army Outflanking Overseas

In addition to the domestic market, domestic mobile phone manufacturers are also pressing Samsung and Apple in overseas markets.

Huawei recently released its flagship model P8 overseas. This high-end product, the successor to Mate7, is regarded as a "killer" product to compete with Samsung GalaxyS6 within Huawei. Not only was it compared with GalaxyS6 in various ways by Yu Chengdong, head of Huawei's terminal business, in the press conference PPT, but the press conference was also held before GalaxyS6 was launched in China, and the intention to block it was very obvious.

"From the sales areas of Huawei P7 and Honor mobile phones, the overseas market has huge development potential compared with the domestic market." Zhang Xiaoyun, CMO of Huawei Consumer Business, said that in terms of hardware level, Huawei is not worse than Samsung. "Last year, the sales volume of P7 was 6 million units, of which 30% came from overseas markets."

"The outside world can look forward to Huawei's overseas performance in 2015. Huawei will launch a fierce offensive in some key areas to challenge the Apple and Samsung markets." A Huawei insider told our reporter that starting from 2015, Huawei's consumer business will heavily deploy in more than a dozen overseas countries, the proportion of overseas revenue will increase to 60%, and the proportion of high-end models will increase to 30% of the total models.

According to the figures previously provided by Huawei terminals, some markets for Huawei mobile phones have entered a period of explosive growth, among which the growth in the Middle East and Africa reached 254%, the growth in Latin America and Europe was 104% and 77% respectively, and the Asia-Pacific region was 122%.

Lenovo, which acquired Motorola , is also active in overseas markets and hopes to directly challenge Apple and Samsung in the key mobile phone area.

"Motorola's influence in the North American and Latin American markets, its R&D team of thousands of people, and its relationships with operators will enable us to expand in mature markets such as North America at relatively low prices. After all, in these mature markets, without patents, you can't make any progress," said Yang Yuanqing, president and CEO of Lenovo Group.

Lenovo recently released its forecast for mobile phone sales this year, saying that total smartphone shipments (including Lenovo and Motorola) will exceed 100 million units, and will drive Motorola Mobility to turn losses into profits. It also said that a high-end Motorola product will be launched within the year.

The competition in the mobile phone market is far more intense than imagined.

Although according to IDC data, Huawei, Lenovo and Xiaomi have currently squeezed into the top five global mobile phone rankings, analyst Yan Zhanmeng believes that there is still a huge gap in market share compared with Apple and Samsung.

"Although Samsung's performance in China has declined significantly, it still has a large shipment volume in the global market. In the fourth quarter of last year, Samsung accounted for 20% of the total global smartphone shipments, and Apple's share was close to this figure. Huawei, Lenovo and other brands are around 7% and 6% respectively," Yan Zhanmeng told reporters.

Due to patent and other issues, some domestic mobile phones are unlikely to replicate their strategies in the Chinese market overseas in the short term. Take Xiaomi as an example. Although Xiaomi's shipments in China accounted for 14% of the market share in the fourth quarter of 2014, almost twice that of Samsung, this was a victory in a single market. The above-mentioned analyst told reporters that Xiaomi's real benchmark against Samsung cannot be separated from its global layout. This is Xiaomi's bonus, but it will also face huge challenges.

"It is almost impossible for Chinese manufacturers to surpass Samsung and Apple in the global market within three years, but some domestic mobile phone manufacturers are on the right track, strengthening their strengths and reducing their weaknesses, and there will definitely be such opportunities in the future," Wang Yanhui, secretary general of the China Mobile Alliance, told our reporter. "It is almost impossible for Chinese manufacturers to surpass Samsung and Apple in the global market within three years, but some domestic mobile phone manufacturers are on the right track, strengthening their strengths and reducing their weaknesses, and there will definitely be such opportunities in the future."

At Samsung's annual meeting in 2013, a photo was shown that fit the occasion - people were about to reach the top of a snowy mountain. Samsung Group's "head" Lee Kun-hee said in his New Year's speech: "The closer we get to the top of the mountain, the stronger the wind blows, but we can't stand still." Soon after, Samsung's smartphones rose rapidly, making it the world's leading smartphone company.

Today, Samsung is facing the biggest challenge since reaching the top. Its Chinese rivals are launching the fiercest offensive against it. According to IDC data, in the fourth quarter of 2014, Samsung's market share in China has dropped from 20% at the beginning of the year to 8%, and it has been overtaken by Chinese manufacturers for three consecutive quarters. Huawei, Lenovo, and Xiaomi are all ahead of it.

"In the first quarter of 2015, we expect Samsung's shipments in China to remain at a low level, with the market ranking around fifth." Yan Zhanmeng, senior analyst at IDC China responsible for mobile phone market tracking reports, said in an interview with China Business News yesterday that Chinese mobile phone manufacturers showed an upward trend in brand and market share in 2014, and this year they are showing a trend of collectively conquering overseas markets.

Yan Zhanmeng told reporters that among the top five global manufacturers in terms of shipments in the fourth quarter of 2014, three were Chinese manufacturers, and all of them will strive to achieve the "100 million units shipment" goal this year.

Samsung "falls behind" in Chinese market

Samsung still failed to escape the curse of sluggish shipments in the first quarter.

After more than half a year of declining shipments, IDC predicts that Samsung will rank fifth in the first quarter, which is the same as last quarter. Samsung is now in a difficult situation, with Apple and Huawei in the mid-to-high-end market and domestic mobile phone manufacturers represented by Xiaomi in the lower-end market.

"For almost every Mate 7 sold by Huawei, Samsung sells one less Note 4, and the customer overlap is very high." A Samsung channel agent told the media that Samsung's channel was severely damaged by dumping goods in the second quarter of 2014, and is still in the repair and adjustment period. Therefore, it is mostly waiting and watching for the initial distribution of Galaxy S6. Currently, 70% of the major domestic public retail channels are selling Huawei phones, and the trend has reversed.

Samsung's success comes from the integration of the supply chain. Samsung purchases major components such as semiconductors and displays on its own. It is the only integrated electronics company in the world that can produce most mobile devices such as smartphones, tablets, and wearable electronics. However, with the participation of more and more Chinese manufacturers, this unique competitive advantage of the supply chain has been gradually broken.

"Apple has its own business chain and ecological chain. It is not easy to surpass its own ecosystem. But compared with Samsung, our project is no less than its own. As long as we keep working hard, everything is possible." The head of a domestic mobile phone manufacturer said that except for not making screens, mobile phone manufacturers have no other disadvantages in the supply chain.

"In the 2G era, the sales structure of mobile phones was pyramid-shaped; but now in the hybrid era of 3G and 4G, the sales structure of mobile phones is abnormal. Mobile phones in the 1,000 yuan range and around 700 yuan account for a large proportion, while the volume of mobile phones around 400 yuan is not very large. The 1,000 yuan range is the advantage of domestic mobile phones." Coolpad Vice President Cao Jingsheng told our reporter.

Samsung has felt this pressure since last year, with its global sales of mobile phones declining and its core business, smartphones, experiencing its first decline in global market share in four years. Xiaomi, known for its "cost-effectiveness", replaced Samsung as the top seller in China in the second quarter. Many analysts believe that Samsung is still in danger.

Yan Zhanmeng told reporters that as Samsung's sales and market share fluctuate, the global market landscape will continue to change.

Chinese Army Outflanking Overseas

In addition to the domestic market, domestic mobile phone manufacturers are also pressing Samsung and Apple in overseas markets.

Huawei recently released its flagship model P8 overseas. This high-end product, the successor to Mate7, is regarded as a "killer" product to compete with Samsung GalaxyS6 within Huawei. Not only was it compared with GalaxyS6 in various ways by Yu Chengdong, head of Huawei's terminal business, in the press conference PPT, but the press conference was also held before GalaxyS6 was launched in China, and the intention to block it was very obvious.

"From the sales areas of Huawei P7 and Honor mobile phones, the overseas market has huge development potential compared with the domestic market." Zhang Xiaoyun, CMO of Huawei Consumer Business, said that in terms of hardware level, Huawei is not worse than Samsung. "Last year, the sales volume of P7 was 6 million units, of which 30% came from overseas markets."

"The outside world can look forward to Huawei's overseas performance in 2015. Huawei will launch a fierce offensive in some key areas to challenge the Apple and Samsung markets." A Huawei insider told our reporter that starting from 2015, Huawei's consumer business will heavily deploy in more than a dozen overseas countries, the proportion of overseas revenue will increase to 60%, and the proportion of high-end models will increase to 30% of the total models.

According to the figures previously provided by Huawei terminals, some markets for Huawei mobile phones have entered a period of explosive growth, among which the growth in the Middle East and Africa reached 254%, the growth in Latin America and Europe was 104% and 77% respectively, and the Asia-Pacific region was 122%.

Lenovo, which acquired Motorola , is also active in overseas markets and hopes to directly challenge Apple and Samsung in the key mobile phone area.

"Motorola's influence in the North American and Latin American markets, its R&D team of thousands of people, and its relationships with operators will enable us to expand in mature markets such as North America at relatively low prices. After all, in these mature markets, without patents, you can't make any progress," said Yang Yuanqing, president and CEO of Lenovo Group.

Lenovo recently released its forecast for mobile phone sales this year, saying that total smartphone shipments (including Lenovo and Motorola) will exceed 100 million units, and will drive Motorola Mobility to turn losses into profits. It also said that a high-end Motorola product will be launched within the year.

The competition in the mobile phone market is far more intense than imagined.

Although according to IDC data, Huawei, Lenovo and Xiaomi have currently squeezed into the top five global mobile phone rankings, analyst Yan Zhanmeng believes that there is still a huge gap in market share compared with Apple and Samsung.

"Although Samsung's performance in China has declined significantly, it still has a large shipment volume in the global market. In the fourth quarter of last year, Samsung accounted for 20% of the total global smartphone shipments, and Apple's share was close to this figure. Huawei, Lenovo and other brands are around 7% and 6% respectively," Yan Zhanmeng told reporters.

Due to patent and other issues, some domestic mobile phones are unlikely to replicate their strategies in the Chinese market overseas in the short term. Take Xiaomi as an example. Although Xiaomi's shipments in China accounted for 14% of the market share in the fourth quarter of 2014, almost twice that of Samsung, this was a victory in a single market. The above-mentioned analyst told reporters that Xiaomi's real benchmark against Samsung cannot be separated from its global layout. This is Xiaomi's bonus, but it will also face huge challenges.

"It is almost impossible for Chinese manufacturers to surpass Samsung and Apple in the global market within three years, but some domestic mobile phone manufacturers are already on the right track, strengthening their strengths and reducing their weaknesses. There will definitely be such opportunities in the future," Wang Yanhui, secretary-general of the China Mobile Alliance, told our reporter.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.